Complaints on finance firms hit record high

 
Tim Wallace
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CUSTOMER complaints about finance firms almost doubled last year, breaking the half-million mark, the Financial Ombudsman Service (FOS) revealed yesterday.

The 508,881 new cases represent a 92 per cent increase on the year, while the service also had to cope with 1.5m other enquiries from consumers.

The surge is a result of consumers becoming more aware of their rights and more willing to question businesses, the FOS said, while firms are yet to catch up and improve their internal complaints handling procedures.

The rise was led by payment protection insurance complaints, which made up 74 per cent of all new cases and came in at 378,699, a 140 per cent rise on the year.

Complaints against banks made up 74 per cent of the total, with general insurance intermediaries a distant second on six per cent, general insurers on 5.5 per cent and building societies on 4.5 per cent.

The FOS said banks need to become better at handling their claims internally, as the complaints only end up at the ombudsman when internal processes have failed.

“In the blame game that too often surrounds the financial sector, there have been suggestions that the PPI crisis is a manufactured one – bolstered by a raft of bogus complaints made through claims-management companies,” said FOS chairman Sir Nicholas Montagu.

“The evidence suggests that this is simply not true – as our rates for upholding complaints, including those made through claims managers, show.”

The agency also saw an increase in complaints about other products aside from PPI.

Complaints about current accounts jumped 34 per cent, mortgage endowments 43 per cent, pet insurance 50 per cent and payday loans 83 per cent.

But others declined, led by structured investment products which saw complaints fall 22 per cent, point-of-sale loans which fell 14 per cent and contents insurance which edged down by three per cent.